Remember, that while the blue light of the sky makes the shadows blue, the effect can also be contributed to the eye/brain, which is doing it's own white balancing. The result is that a perfectly gray surface will look blue next to an orange surface.

hmm... what could fix that is a radiosity implementation, where the light bounces on a wall and then back onto the direct light again, producing glow... im not sure how id do that just with this little ambient occlusion system.

hmm... what could fix that is a radiosity implementation, where the light bounces on a wall and then back onto the direct light again, producing glow... im not sure how id do that just with this little ambient occlusion system.

Darken your AO and then brighten the whole thing this should make the non-shadowed area stand out more.

Do you use some kind of tone mapping like the Reinhard's tone mapping operator or something?